By QUINTON SMITH/YachatsNews
WALDPORT – Citing what it believes are “financial irregularities,” the city of Waldport says it has stopped permission for Waldport Beachcomber Days to use city property until the nonprofit clears up its questions on a variety of funding and legal reporting issues.
In the last three years, the nonprofit has become the largest and most visible civic group in town, revitalizing and organizing the three-day Beachcomber Days celebration each June, the Waldport Wednesday Market, a Halloween Trunk-or-Treat event, and a variety of Christmas activities each December.
In a news release announcing the action, city manager Dann Cutter said “We ask everyone to be patient and not rush to judgment. These volunteers are our neighbors and friends – please let the process work.”
But the statement also said that Beachcombers’ financial reports and disbursements “create concern regarding Waldport Beachcomber Days’ qualification as a 501c3 charity organization and are in direct violation of IRS rules.”
“As such, the city has notified the Beachcomber board president of these concerns and has withdrawn its authorization and support for the Beachcomber organization’s activities within the city while they work through these issues.”
To resume that support, Cutter said the city will require the Beachcomber organization to:
- Provide an independent accounting report from a third party of financial records during any period of city funding;
- If the audit finds specific violations, a self report to the Oregon Department of Justice’s Charitable Activities division;
- Provide minutes or showing adoption of financial practices into bylaws which will help prevent financial issues in the future; and
- Submit a report showing that all funding to any non-qualifying individuals or expenses was paid back.
“Until that time, city funding is not available, nor is free usage of the cities’ community spaces, nor support for any event using city functions to garner financial support/recognition,” Cutter said in an email.
Cutter said the requirements are only for city support and use of its property, including permits for closing streets.
“Please keep in mind, these requirements are only for city support,” he said. “Any 501(c)3 which wants can totally ignore us … as long as they need nothing from us, it’s their business how they operate.”
In a followup email to the Beachcomber organization Wednesday, Cutter said the reports so far from the organization show confusing entries for Beachcomber Days in June and no expenses or revenue from its other activities such as the Wednesday market or Christmas events.
“… there is significant enough concern to suggest that the financial irregularities uncovered, and the potential misallocation of funds to disqualified family members warrants further independent investigation of compliance by a third party,” the email said. “There may be perfectly valid explanations for all the discrepancies shown. However, in the multiple requests for information and transparency from Beachcombers, we have gotten conflicting information, and finally no response at all since addressing our concerns.”
Issues are a misunderstanding
Beachcomber board president Tammy Abele said Tuesday that the issue “is a straight up misunderstanding” between the organization and the city and that the nonprofit is “100 percent confident this will be resolved.”
Abele and other board members declined to comment further until a representative speaks at Waldport’s monthly city council meeting at 4 p.m. Thursday.
The group has a four member board and a 23-member main committee, said Tianne Rios, board secretary. Other board members are Amy Skirvin, the principal at Waldport High/Middle School who organizes the group’s timber show, and Sheila Ping, treasurer.
The organization sent an email this week to Wednesday market vendors saying it the city’s claims were “unsubstantiated” and it intended to clear them up. The email said the organization’s tax documents have been accepted by the IRS, the board has “actively avoided conflicts of interest with all transactions involving disqualified individuals” and that “Our financials are clear and reconciled to our bank account.”
“We intend to clear up these unsubstantiated claims by working with the city to provide detailed and accurate financial data, board minutes and any other supporting documentation,” the email said. “We intend to obtain reinstatement of our permits/licenses/agreements and maintain a positive working relationship with the city council and city manager.”
In the meantime, the group’s plans for its Halloween Trunk or Treat scheduled Oct. 26 at the Waldport Community Center will move to the parking lots of Central Coast Fire & Rescue’s main downtown station.
Differences over records
The nonprofit is not a big money organization, according to the latest IRS 990 form filed in 2023 for the 2022 calendar year.
According to that filing, Beachcomber Days started 2022 with $32,679 in the bank, took in $18,800 in contributions and grants, but spent $39,279 for grants and other expenses, for a balance at the end of 2022 of $12,363.
The city of Waldport gave Beachcombers $2,500 last fiscal year and has $2,500 set aside for the group in its 2024-25 budget. But it also issues permits for Beachcombers to use the community center’s parking lot, close streets for the big celebration in June, and has set aside an area in the new Louis Southworth Park to run its timber festival.
Other than expenses to stage the various events, proceeds from the organization’s fundraising goes to scholarships for Waldport students. This year Beachcomber awarded $16,000 in scholarships to 15 students that ranged from $3,800 to a graduating senior to $75 to an eighth-grader.
The city is concerned that Beachcombers has awarded scholarships to children of board members – apparently a practice not allowed under Internal Revenue Service regulations of nonprofits. A list of which students or what other organizations got Beachcomber grants was not included in the IRS’ required Schedule O that is supposed to be filed with the 990 form.
Cutter told YachatsNews that Beachcomber officers later sent him a list of scholarships it awarded this year, but identified the recipients only by initials. He has asked for a revised Schedule O that names all the recipients for the past four years to check to see if they are related to board members or major donors.
“We’re just trying to do our due diligence,” he said.
- Quinton Smith is the editor of YachatsNews.com and can be reached at YachatsNews@gmail.com
Marilyn Miller says
I am glad this is being reviewed.